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With a hegemonic war over semiconductor production and distribution being waged, Korea, home to two memory chip giants Samsung Electronics and SK hynix, is responding by aiming to become a world-leading chip powerhouse by 2030.

In May, President Moon Jae-in unveiled his “K-semiconductor” blueprint to firmly place Korea within the world’s largest semiconductor supply chain – for both memory and system chips – by 2030 in cooperation with local chip companies to make the country a global leader.

Under this vision, the government said it will provide huge tax benefits to companies constructing semiconductor facilities here, encouraging them to spend a combined 510 trillion won (US$441 billion) by the target year.

“We will solidify our position as the world’s top memory semiconductor producer and take the lead globally in system semiconductors as well, thereby achieving the goal of becoming a comprehensive semiconductor powerhouse in 2030,” President Moon said during a ceremony at Samsung Electronics’ plant in Pyeongtaek, south of Seoul on May 13.

“Building upon the competitiveness of our semiconductor industry, we will secure advantageous positions ahead of others through competition in various industries and take off as a pacesetting country in the post-COVID-19 world,” the President added.

According to the plan, Korea will create a "K-Semiconductor Belt" southwest of Seoul incorporating Pangyo, Giheung, Hwaseong, Pyeongtaek and Onyang, and a central region connecting Icheon, Yongin and Cheongju. The belt will encompass everything to do with the semiconductor business – manufacturing, materials, components, equipment and design.

Korea’s vision to nurture the semiconductor industry comes at a time when the global industry is set to be reorganized.

With the United States and China engulfed in a trade war since 2018, the two superpowers are placing more importance on supply chains for semiconductors and related technologies.

The U.S. has started to recognize the chip industry as a strategic component in national security as U.S. President Joe Biden vowed in April to make aggressive investments in domestic chip manufacturing saying, “We’re going to lead it [the world] once more in the 21st century.”

China is trying to stand on its own feet, working hard to develop its own semiconductor technologies and aggressively purchasing chip-making equipment. The European Union also announced its bid to double its chip manufacturing output to 20 percent of the global market by 2030.

Lee Seung-woo, an analyst at Eugene Investment & Securities, suggests Korea must continuously revise its strategy to achieve sustainable growth in the country’s chip industry.

“Korea’s share of the total global semiconductor market is 22 percent, following the U.S. with 54 percent. In particular, Korean has an overwhelming advantage in the DRAM memory field with 70 percent, and it holds 55 percent of the NAND flash memory chip market. However, Korea’s market share is still very low in fabless fields, design software and semiconductor equipment,” Lee said in an article posted on the Korea Development Institute.

“As such, the Korean semiconductor industry has very distinct strengths and weaknesses. For the development of the Korean semiconductor industry, strategic and sophisticated policies and measures must be prepared to protect its strengths and compensate for its weaknesses,” Lee further noted.

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